This is the part where the anti-HOA types lose me. I appreciate the distinction between an effective rent system and ownership as Merlin has discussed in his posts. What I disagree with is that it is impossible to make an HOA (or HOA-like, if the way current HOA contracts are written is technically invalid in language if not in spirit) agreement.
What if I sign a contract with my neighbor saying I will always trim the hedges so they are no taller than 5 feet, and if I fail to do so I forfeit ownership of the hedges and it transfers to him instead. Is that somehow invalid? What if we also write in that I may not sell my property to someone who refuses to make an identical hedge-trimming agreement without also triggering the transfer of ownership to the current neighbor. Is that invalid?
Clearly a potential buyer is in no agreement with my neighbor, but if I sell the property to him I am not suddenly freed from my previous contract obligations. Instead, I am either fraudulently selling rights to a property that has a prior claim if I don’t tell the buyer, or simply selling the property without honoring my previous contract and so the buyer is taking a risk that the neighbor will exercise his prior claim on the hedge area.
If I sign such an agreement, and actually forget to trim, I can cancel it before I transfer the hedges. Its this simple: as long as it’s my property, I will abide any ‘conditions’ only as long as I see fit, and can cancel whichever contract I’ve signed at any time, without any ill to myself. Such are hardly considerable as ‘conditions’ at all.
Are you saying all contractual obligations are invalid at either party’s discretion, or only obligations of these types? If the former, why would anyone ever agree to any contract if it can be violated or nullified at will with no penalty?
Well, if you think you can survive without exchanging anything at all with your fellow humans, that’s your call.
The thing is, as Rothbard brilliantly pointed out, that human will is absolute, and cannot be superseded by past conventions of any kind. All human relations must be voluntary, and not just at inception, but at all times. Any other standard would be slavery and statism.
Take a labor contract: I sign with some company for 5 years, and 6 months later I get e better offer. Now, if I’m not allowed to cancel, than I’m effectively a slave for the next 5 years, working against my will. Would you agree with this?
I’m quite sure the state itself could be justified along such lines.
It is true that is many cases this could expose one to unreliable partners, but that’s a risk we must be ready to take when we want all interactions to be voluntary. In time, of course, people with poor track records of reliability, ex. a guy leaving work within a few months several times, would find it hard to enter in new agreements.
If anyone could simply disregard contracts whenever they wanted, how could there possibly be any trust and how would anything possibly get done? Are you saying that there should be no consequences to doing so?
If that’s not what you’re saying, then what compensation do you think the company is entitled to for breach of contract?
I agree that people should not be forced to comply with contracts they signed against their will, but they should then pay the consequences of doing so. Otherwise, I could just sign a mortgage with a bank, decide that I no longer want to be “enslaved” by paying down a mortgage, and get a house for practically free. Obviously, there needs to be consequences when the contract is breached, so that although a person may not have to perform a specific action (such as working at a specific job), the other party is still entitled to their just compensation.
Ah, you’re mixing two things here. You can cancel a mortgage at any time, but you’d still own the bank the principal outstanding: you’ve stolen its money! Of course there will be consequences here. The principal must be repaid, its easy to determine the amount you’ll be ‘fined’ here. Not so with ‘pure’ contracts.
But this is not the HOA example: in the HOA all property tiles have already been exchanged at the beginning, and after the initial purchase, there is no liability outstanding. There must a promise, by my part, to do or don’t do something. So, when you cancel it, you owe nothing.
But with the mortgage case, after the initial exchange, you still owe something, and I’m talking about property (money), not mere promises. There’s a world of difference here.
So, when I advocate the possibility of canceling contracts at will, I do not advocate anyone writing off their liabilities for actual property, just any non-property liability they might have incurred (promises). Its an important distinction, especially with the current continental tradition, when you must follow through with promises.
Of course, I advocate the possibility of you canceling the mortgage at any time, as long as you still owe the bank the principal. If you have the money in hand, it would be foolish for you to pay interest for 10 years, and not repay at once. Most banks do not allow immediate repayment but this is unfair: I can just cancel the mortgage, and all non-property liabilities (i.e. my promise to repay interest in time) go away.
So if I just handed you $100 for your promise to mow my lawn, you are free to change your mind and just leave with the money? There are some great business models one could build with this exciting “contract” concept.
After you sell your car, aren’t you a slave to your car-less situation? Shouldn’t you be free to change your mind and demand your car back?
It’s a little stronger than a simple promise. It’s a contract that says “Do X, or we’ll do Y”. X is defined by the HOA. Y is foreclosing your house. Which judge would look at that contract and say “oh well, it was just a promise anyways. Rip it up!”?
So if I hire a lawyer for a trial case, and he suddenly decides he doesn’t feel like doing the case anymore and doesn’t show up and I lose the case, he owes me nothing?
Ok, agreed. If the banks don’t allow immediate repayment, that might be unfair, but again, if you agreed to it (and the bank did not defraud you), you’re responsible for it. I don’t think mortgages count as contracts of adhesion.
OK, if I promise you that tomorrow I’ll give you 100 bucks, and tomorrow I don’t, can you rightfully take ‘your’ 100 bucks form me? No for, forgetting the contract, what have we exchanged? Nothing at all! As long as the 100 bucks are still mine, I can do whatever I like with them, notwithstanding what I’ve said I’d do with them.
Now, if I pay you 100 buck to mown my lawn tomorrow, and you cancel in the afternoon, what has happened? Must you mow my lawn? No, its just a promise of your, and hence you can default. But that’s no the end of the story. For you do not own the 100 bucks I gave you. For our agreement was that I’d give you 100 buck to mown my lawn, hence those 100 buck become yours when my lawn is mowed, not now. You do not own them, hence I can easily call those back. Is this an acceptable outcome?
Now again with the HOA. Do they say: “You can have this house when you both pay us such and such, and when you do such and such?” If so, its an entirely cool contract, and condition do apply. But that’s not a typical HOA contract. For a typical contract has no when clause, no time when the house is yours. At any time, if you fail to do something, they take it away. Hence, its not a transfer of property. At any time, you can claim you money back, as they can with the house. Its rent.
Ok, up till now, nobody has really been able to prove that HOAs are unlibertarian.
Main point of contention #1: HOAs amount to you not having full ownership of your property.
My reply: So what? That’s the whole point! That doesn’t make it unlibertarian in principle if you voluntarily agreed to it.
Main point of contention #2: HOA contracts are invalid.
My reply: How so? A contract isn’t invalid simply because you don’t feel like following it anymore. Go and tell that to the judge.
An article on this site also appears to support HOAs (I linked to it earlier).
Personally, I find it disconcerting, because I’d be happier if there was a decidedly unlibertarian flaw in the HOA model, but so far I don’t see one.
I think there are limits to an HOAs power which governments have, but which an HOA could not legitimately have. For example, you could not contract to pay 30% of income tax and have that automatically transfer to your children. The children never entered into that contract, so why should they be liable for it?
There is a way around that limit for the HOA. They could just contract with the property “owner” upon purchase and stipulate that he must pay a tax in proportion with the resident’s income. It’s up to him on how to collect it (he can simply make it a condition of continuing to live in his adobe). If agreed by the property owner upon time of purchase, then it is voluntary. If agreed by the residents of the home, then it is voluntary (after all, the owner can always change his mind on the terms and conditions of living in his own house!)
I don’t think a competitive world would ever get this bad, but it does seem like there is no libertarian defence against abusive HOAs that foreclose against their owners for small debt arrears. I would love for there to be one, though.
If you put it in writing and signed the contract, I don’t see why I couldn’t take the hundred bucks. If you want an escape clause, you need to put that in writing as well. The world you propose where contracts could be broken willy nilly would lead to chaos and disorder.
It’s a contract that says “Do X, or we’ll do Y”. X is defined by the HOA. Y is foreclosing your house. Which judge would look at that contract and say “oh well, it was just a promise anyways. Rip it up!”?
I would. And is’ my belief that most other arbiters in a competing market would do the same.
So if I hire a lawyer for a trial case, and he suddenly decides he doesn’t feel like doing the case anymore and doesn’t show up and I lose the case, he owes me nothing?
Just what you paid him (if anything). See the lawn example in the post above.
Ok, agreed. If the banks don’t allow immediate repayment, that might be unfair, but again, if you agreed to it (and the bank did not defraud you), you’re responsible for it. I don’t think mortgages count as contracts of adhesion.
I agreed and now I changed my mind. What is mine remains so, what is not mine reverts to the owner.
Wow, are you serious? So I have a contract for specific performance, I don’t get it, and I’m not entitled to any damages?
If you’re a service provider and your services are hosted with a data company where you have a 99.99% availability contract, and suddenly the data center goes down, they can decide that they don’t have to keep their promise anymore? I can then in turn tell all my customers to screw off, even if I made a similar promise with them?
You do realize that in a world where promises have absolutely zero effect, even if in a contract in writing, that there could be no complex society? If you were an arbitrator, you would NOT be getting any of my business
If you put it in writing and signed the contract, I don’t see why I couldn’t take the hundred bucks. If you want an escape clause, you need to put that in writing as well. The world you propose where contracts could be broken willy nilly would lead to chaos and disorder
Because the contract is a piece of paper, no more powerful or magical than the constitution. Contracts, as I see it, are not for purposes of legitimation, but of proof that an agreement existed at a time. A contract is not the agreement itself! A simple handshake would do.
In this case, no mater what the piece of paper says, the money is not yours, its mine. And you have no right to take it, as long as I violated no NAP. And how did I violate it in such a case?
Ok, up till now, nobody has really been able to prove that HOAs are unlibertarian.
HOA’s can be libertarian. My point of content is that, if my neighbors decide to form a HOA and begin to impose rules, I can give them the finger as I’m on my property.
But if I live on a rented house of course I’m bound to do as the owner says. The state itself (as I discussed din my very first post some time ago,) if it gives up Eminent Domain and stops no one form leaving, has every right to do what it want with everyone on its property. Even Stalin would be cool under such conditions.
Wow, are you serious? So I have a contract for specific performance, I don’t get it, and I’m not entitled to any damages?
What did you give the lawyer? A million for defense. No defense, no million. Its that simple. The million becomes his after he defends me. He doesn’t defend me, the million is still mine. Now what makes you think you can take his money?
If you’re a service provider and your services are hosted with a data company where you have a 99.99% availability contract, and suddenly the data center goes down, they can decide that they don’t have to keep their promise anymore? I can then in turn tell all my customers to screw off, even if I made a similar promise with them?
What if a meteor hits the servers? Do you want damages? What if a nuclear blast fries the lines? What if the owner dies and his heir has no intention to continue doing business?
Now, I agree that it might cause you much, much trouble but a guy screaming obscenities can too. Does this mean that I’m entitled to shut him up?
One must set apart damage to one’s property caused by physical violations, and those caused by anything else. The former aren’t punishable, you’ll have to insure again those. The latter are, and the perpetrator must bear the cost.
Insurance companies always set apart the part of premium that corresponds to the time period not yet elapsed? Why do they do that? Because you might want that back. Is it cheap for them to do so? Terribly expensive. Does anyone doubt the necessity of premium reserves? No one I know off.
You do realize that in a world where promises have absolutely zero effect, even if in a contract in writing, that there could be no complex society? If you were an arbitrator, you would NOT be getting any of my business
Again, its not the piece of paper that is portent. Its the knowledge of consequences. Would you contract anew with that SP above? Would I call that lawyer again? This is what makes people keep promises, not police (be their libertarian) knocks on the door.
I am certainly entitled to damages when a contract is broken. It’s more than a simple promise.
If contractual promises are null and void, then why would anyone ever contract to do anything? As an insurance company, I could just decide I don’t feel like paying out anymore if hit with a big claim. I could take the money and run, and in your world, the clients couldn’t do a thing against me.
If I were a data center, I could just turn all my servers off and call it a day. If my customers call me up screaming that I had a 99.99% level service agreement with them, I’ll just laugh in their faces and keep their money.
Seriously, it seems like a rather absurd world that you’re proposing. You’re stating that all contracts are essentially null and void since anyone can change their mind at anytime. But again, we’ll see who picks you as an arbitrator and who picks judges who recognize that contracts have more strength than a “simple promise”.
The insurer cannot rightfully flee with the money, because only the earned premium is his. If he cancels at midyear, only half the premium is his, the other half is yours. If the flees with that, he stole your property, and you can rightfully prosecute.
The money your client gave you as a data center operator becomes yours at years’ end. If you shut things down its fine, but the money you took is still theirs. If you do not return it, you’ve stolen it.
If, on the other had you provide the service for free (say, yahoo mail) no one can hold anything against you, as you’re holding no one’s property but your own. Cancel their account for all the law cares (and see if anyone is willing to sell you bread afterwards J).
He still gets to keep all the premiums paid up until that point under your system, premiums that turned out to be worthless.
Then you return whatever was “stolen”. The customers are still shit out of luck cause they lost a lot more than that, because of you, and under your system, they’re not entitled to anything, even if there was a contractual obligation.
That’s different. I never signed a 99.99% service level agreement with Yahoo mail or anything like that.
I think I understand wher you are coming from on the HOA contracts not being binding.
The HOA contract is not binding because real property has not been exchanged. The property exchange was between you and the previous owner. That is a separate transaction independant of any agreement between you and the HOA. The contract signed with the HOA is not binding because you are only promising to do certain things in exchange for nothing. If you stop doing those things then the HOA has been deprived of nothing.
